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One City’s Response to the Retail Slump

The first couple of months this year have been a tsunami of bad news for retailing in my Old Kentucky Home.

First came the news that Macy’s was closing one of its two Louisville-area locations, part of an overall strategy by one of the country’s last true department store retailer to downsize its chain.

Then the one remaining Kmart store here was shuttered, also part of a national strategy by the people still running Sears and Kmart operations.

Then Gap closed one of its two local stores, a once-thriving mainstay of a once-thriving enclosed mall.

Then The Limited closed its big mall store here, a broad storefront that faced a busy avenue and once announced to the consuming world at large that fashion was going on behind its large windows.

Finally, rumblings within the JCPenney organization of a national downsizing seemed to put the area’s three remaining local stores at risk.

I know this is all playing out in cities of all sizes across the country. And we’ve been discussing for a decade and a half how the onrush of online shopping was threatening to make obsolete the fundamental purpose of this industry you all share – the builders, designers and suppliers of brick-and-mortar stores.

Interestingly, though, local real estate professionals maintain that the retail market around here has never been stronger. Food retailers, in particular, are thriving. Cincinnati-based Kroger regards nearby Louisville as one of its most successful markets.

Whole Foods, Trader Joe’s and some locally based fresh and organic purveyors are doing well here, too. Nor do the Big Three of mass merchandising seem to have been affected: Walmart, Target and Meijer’s are all exploring new concepts in which grocery takes up a greater share of square footage. Meijer’s recently hired about 250 new employees for its six area stores.

In some cases, developers are looking for ways to break down those 100,000-square-foot big boxes into smaller retail spaces. In other cases, just the opposite. Kroger recently opened one of its big Marketplace stores in an old Kmart location.

And Lowe’s, for one, has heeded that buzzword-of-today warning to create “an experience.” The home goods giant, which has five large area locations, has announced an employee cross-training effort to “bring back-of-the-house to the front of the house,” in the words of Louisville real estate professional Justin Baker, founding partner of the Trio Commercial Property Group. “It’s an economic initiative, of course. But it also fills the store with more bodies available for customer service.

“The retail business is challenging, we all know that,” Baker told me. “And for some – certainly for a nuts-and-bolts retailer like Lowe’s – that ‘experience’ may be no more exciting or high-tech than simply using employees to respond to customers’ needs for help and information.”

As the Beatles once sang, “We’re all doing what we can.”

As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20-plus years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.